US may soon claim $1.7b penalty from China’s ZTE

WASHINGTON, June 03 (Reuters): The Trump administration may soon claim as much as $1.7 billion penalty from ZTE Corp, as it looks to punish and tighten control over the Chinese telecommunications company before allowing it back into business, according to people familiar with the matter.

The Commerce Department is also seeking unfettered site visits to verify US components are being used as claimed by ZTE, and wants it to post calculations of the US components in its products on a website, the people said.

China's No 2 telecommunications equipment maker has been crippled by a ban imposed in April on buying US technology components for seven years for breaking an agreement reached after it was caught illegally shipping goods to Iran and North Korea. The negotiations with ZTE come as US Commerce Secretary Wilbur Ross heads to Beijing this weekend for trade talks.

One source said Washington also wants ZTE to replace its board and executive team as soon as 30 days, but a deal still has not been finalized and the sources cautioned that the penalties were fluid and the terms could change.